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In the News

Will Equity Answer Wealth Management’s “Compensation Conundrum?”

Posted by Barbara Herman

October 5, 2020
Barbara Herman Quoted
By Charles Paikert

What keeps owners of wealth management firms up at night? Compensation, recruiting, retention and equity certainly top most lists.

According to Schwab’s 2020 Compensation Report, median compensation costs are 70 percent of revenues for firms with over $100 million in AUM.

There are also plenty of advisors who aren’t interested in equity in an RIA because they want to minimize risk, recognizing there is a downside to ownership as well as an upside, according to Barbara Herman, senior vice president for the executive recruiting firm Diamond Consulting.

Established advisors who have worked for wirehouses and been paid on a grid are especially reluctant to move to an RIA’s salary and bonus structure, Herman said.

What’s more, in many cases equity ownership isn’t enticing enough to get a top breakaway advisor to join an RIA because there are so many turnkey solutions available for firms to set up their own RIAs, Herman pointed out.

“There are so many options now for advisors who don’t want to become an employee,” she said.

Read more…

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About Barbara Herman

Senior Vice President – Known for her sound advice, unique perspectives and ability to identify creative solutions. Barbara has developed deep and longstanding strategic relationships with financial services firms – from wirehouses to boutiques, as well as the diverse independent space – and works with some of the most sophisticated teams and individual advisors. Learn more...

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